Budget blues set in with December 5th fast approaching

By Keelin Riley and Sophie Cairns

The budget will be announced on December 5th in the Dáil


As Budget Day fast approaches, Keelin Riley and Sophie Cairns explore the many possibilities that the public can expect. 

With just a few weeks until the dreaded Budget Day, the large majority of Irish people are wondering just how they will cope if their already cut income is slashed any further.

December 5th will be considered a harsh day for the country, with citizens expected to be squeezed as taxes and cuts of €3.5 billion must be implemented.

With such a huge amount to be cut, areas thought previously untouchable will surely be on the chopping block next week. Speculation says that everyone, young and old, will feel the pinch.

In November 2011 there was outrage in Ireland when it emerged that German MPs were given details of the 2012 budgets before Budget Day here.

These documents proposed that next year revenue must be increased by €1.25 billion through a restructuring of motor taxation, a broadening of personal income tax base and a reduction in general tax expenditures and other indirect taxes. Also, spending must be slashed by €2.25 billion through a reduction in social welfare payments, public service numbers and public service pension adjustments.

So what can we expect? Firstly, a Carbon Tax, which will affect gas, petrol and diesel and an increased VRT is also to be expected, which will hike up the cost of new cars. Further restructuring is expected on the Motor Tax as well.

An increase in Excise Duty on alcohol and tobacco is also foreseen. Duty on alcohol was decreased by 20% in the 2010 Budget but has not been touched since. If duty on beer was to increase by 25% it would mean a 10c increase per pint. Beer is not the only one to be hit, with all types of alcohol likely to increase.

PRSI will probably be charged on income that is not from employment, such as rental income and dividends from shares. As for the Property Tax, details are not going to be announced until shortly after the Budget is unveiled. However it is speculated the average tax could be in the region of €300 to €500 per household.

Another possible area being examined is the medical card with the Government said to be looking at the qualifying criteria as a result of the massive costs of providing free medical care.

The young are not to escape either as it is predicted that education overruns will force a reduction on school grants and an increase in class sizes. Child Benefit cuts of some form are to be expected. Probably with balancing increases on means testing so that poorer families are not affected.

As for third level students, The IMF pointed out that the annual cost of subsidizing college fees for 160,000 Irish students in 2010 was about €1.2billion. A suggestion of reintroducing fees that vary by course has been taken into consideration.

The Universal Social Charge is said to possibly increase for higher earners. There will also be a tightening of various other taxes and tax reliefs. A new single welfare payment for working age people will be one of the major reforms. Privatisation of state assets is also on the cards – with the receipts being used to reduce debt. ESB have already been told to prepare to sell €400 million of assets. More sell-offs may be announced in the Budget.

Minister of Finance Michael Noonan declined to comment on Budget speculation, including the possibility of a hike in the Universal Social Charge rate for higher earners. He said people will have to “wait and see” until December 5th.

The Liberty locals speculate on the budget (Click blue text to listen)

“I walk around the city with very little money in my pocket and I know what it is like to be hungry, none of the people who make these budgets do. At the moment I’m helping two families who haven’t enough to feed the family fully. They have to give them stale eggs for breakfast because they couldn’t afford anything else.” Robin Brown, 65, Sandymount

“All your household bills are going up, your transport costs going up and you’re not getting it back in your wages. People say you’re lucky to have job, but it seems those claiming welfare and working part time are better off than the people who work. Crazy.” Avril Smith, 56, Clonsilla

“Most of the year I’m a job seeker, but my mother’s a lone parent with me and my little brother. We receive benefits, but they’re a pittance, an absolute pittance. Single mothers are the most looked down upon in society and it’s terrifying because every year they take more and more and there’s less to take. It’s disgraceful. We’re all very very scared.” Lisa Harris, 21, Dublin 2

“I’m not interested. What is the point because what ever the Government want, the Government gets. There’s no interest in the younger generation or anybody that’s out working. They want more people on the dole as far as I can see. At the end of the day you’re getting up out of the bed, doing a full days work and you’re seeing nothing at the end of the week.” Bernie Mulhollen, 52, Finglas



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